Monday, March 6th 2023
Price War Looming for Mature Fab Nodes in Taiwan
The smaller foundries in Taiwan—at least compared to TSMC—UMC, PSMC and VIS to name the bigger players, but also other less well known foundries that produce chips on mature nodes, are getting ready for what looks like a price war. In all fairness, all of these companies have hiked their prices multiple times over the past couple of years, so it might just be a return to more normal pricing for these nodes that we're looking at. According to UDN media in Taiwan, the smaller foundries are offering discounts that range between 10 and 20 percent for new orders placed with them.
This is largely due to underutilised production lines for some nodes and the companies are trying to increase the utilisation rate of these nodes. The article mentions that the foundries with 8-inch wafer lines are those hardest hit, especially as they've produced more specialised ICs, such as fingerprint sensors, various driver ICs and power management ICs to mention a few. Some of these foundries are now running at 50 to 60 percent of their capacity, which doesn't bode well for the industry. On the other hand, 12-inch fabs aren't nearly as badly hit and might not offer as attractive discounts to potential customers. Another threat to the Taiwanese foundries is Samsung, which is reportedly also offering around a 10 percent discount on its mature nodes.
Sources:
UDN, via @dnystedt (on Twitter)
This is largely due to underutilised production lines for some nodes and the companies are trying to increase the utilisation rate of these nodes. The article mentions that the foundries with 8-inch wafer lines are those hardest hit, especially as they've produced more specialised ICs, such as fingerprint sensors, various driver ICs and power management ICs to mention a few. Some of these foundries are now running at 50 to 60 percent of their capacity, which doesn't bode well for the industry. On the other hand, 12-inch fabs aren't nearly as badly hit and might not offer as attractive discounts to potential customers. Another threat to the Taiwanese foundries is Samsung, which is reportedly also offering around a 10 percent discount on its mature nodes.
14 Comments on Price War Looming for Mature Fab Nodes in Taiwan
Personally, it can't come fast enough. The industrial sector is still struggling under a major chip shortage. We got a quote on a price of equipment (that should have been 2-3 months lead time) with a lead time of ~20 months. And it was considered acceptable.
I'm just noting the very confusing times we live in: 1 year ago, it looked like 8-inch wafers were skyrocketing in price. Today, their prices are collapsing.
For all tech hardware segments.
Just seeing the beginning with these cuts.